REPUBLIC ACT NO.

10607

"TITLE 8
"PREMIUM

"Section 77. An insurer is entitled to payment of the premium as soon as the thing insured is
exposed to the peril insured against. Notwithstanding any agreement to the contrary, no policy or
contract of insurance issued by an insurance company is valid and binding unless and until the
premium thereof has been paid, except in the case of a life or an industrial life policy whenever the
grace period provision applies, or whenever under the broker and agency agreements with duly
licensed intermediaries, a ninety (90)-day credit extension is given. No credit extension to a duly
licensed intermediary should exceed ninety (90) days from date of issuance of the policy.

"Section 78. Employees of the Republic of the Philippines, including its political subdivisions and
instrumentalities, and government-owned or -controlled corporations, may pay their insurance
premiums and loan obligations through salary deduction: Provided, That the treasurer, cashier,
paymaster or official of the entity employing the government employee is authorized, notwithstanding
the provisions of any existing law, rules and regulations to the contrary, to make deductions from the
salary, wage or income of the latter pursuant to the agreement between the insurer and the
government employee and to remit such deductions to the insurer concerned, and collect such
reasonable fee for its services.

"Section 79. An acknowledgment in a policy or contract of insurance or the receipt of premium is

conclusive evidence of its payment, so far as to make the policy binding, notwithstanding any
stipulation therein that it shall not be binding until the premium is actually paid.

"Section 80. A person insured is entitled to a return of premium, as follows:

"(a) To the whole premium if no part of his interest in the thing insured be exposed to any of
the perils insured against;

"(b) Where the insurance is made for a definite period of time and the insured surrenders his
policy, to such portion of the premium as corresponds with the unexpired time, at a pro rata
rate, unless a short period rate has been agreed upon and appears on the face of the policy,
after deducting from the whole premium any claim for loss or damage under the policy which
has previously accrued: Provided, That no holder of a life insurance policy may avail himself
of the privileges of this paragraph without sufficient cause as otherwise provided by law.

"Section 81. If a peril insured against has existed, and the insurer has been liable for any period,
however short, the insured is not entitled to return of premiums, so far as that particular risk is
concerned.

"Section 82. A person insured is entitled to a return of the premium when the contract is voidable,
and subsequently annulled under the provisions of the Civil Code; or on account of the fraud or
misrepresentation of the insurer, or of his agent, or on account of facts, or the existence of which the
insured was ignorant of without his fault; or when by any default of the insured other than actual
fraud, the insurer never incurred any liability under the policy.

"A person insured is not entitled to a return of premium if the policy is annulled, rescinded or if a
claim is denied by reason of fraud.

"Section 83. In case of an over insurance by several insurers other than life, the insured is entitled to
a ratable return of the premium, proportioned to the amount by which the aggregate sum insured in
all the policies exceeds the insurable value of the thing at risk.

"Section 84. An insurer may contract and accept payments, in addition to regular premium, for the
purpose of paying future premiums on the policy or to increase the benefits thereof.